Ch.4 Courts and Alternative Dispute Resolution.

US magistrate judge

- help reduce delays in the U.S. district courts. - authorized them to conduct all civil trials as long as the parties consent. -are selected by federal district court judges based on the recommendations of a merit screening committee. They serve an eight-year term (which can be renewed).

Arbitration

- in which an arbitrator (a neutral third party or a panel of experts) hears a dispute and imposes a resolution on the parties. - the third party hearing the dispute makes a decision for the parties. -the parties in arbitration agree that the third party's decision will be legally binding, although the parties can also agree to nonbinding arbitration. - parties present opening arguments and ask for specific remedies. Both sides present evidence and may call and examine witnesses. The arbitrator then renders a decision.

Advantages of Mediation

- less adversarial than litigation. In mediation, the mediator takes an active role and attempts to bring the parties together so that they can come to a mutually satisfactory resolution. The mediation process tends to reduce the antagonism between the disputants, allowing them to resume their former relationship while minimizing hostility.

Mediation

- neutral third party acts as a mediator and works with both sides in the dispute to facilitate a resolution. -the mediator normally talks with the parties separately as well as jointly, emphasizes their points of agreement, and helps them to evaluate their options. Although the mediator may propose a solution (called a mediator's proposal), he or she does not make a decision resolving the matter.

Petitions Granted By the Court

- the Court grants petitions when cases raise important constitutional questions or when the lower courts have issued conflicting decisions on a significant issue. - The justices, however, never explain their reasons for hearing certain cases and not others, so it is difficult to predict which type of case the Court might select.

Other Types of ADR (3)

1. Early Neutral case evaluation 2. Mini-Trial 3. Summary of jury trials

International Dispute Resolution (Two Methods)

1. Forum Selection Clauses 2. Choice of Law Clauses

Providers of ADR services include

1. Government Agencies 2. Private Organizations

Standing can be broken down into three elements:

1. Harm 2. Causation 3. Remedy

A court will set aside an award on an appeal of arbitration in the event of one of the following?

1. The arbitrator's conduct or "bad faith" substantially prejudiced the rights of one of the parties. 2. The award violates an established public policy. 3. The arbitrator exceeded her or his powers—that is, arbitrated issues that the parties did not agree to submit to arbitration.

Courts will not compel arbitration if

1. The parties did not consent to arbitration. 2. If it is clear that the arbitration rules and procedures are inherently unfair to one of the parties.

Before any court can hear a case, it must have jurisdiction over: (3)

1. The person (or company) against whom the suit is brought (the defendant) Over the property involved in the suit 3. The subject matter of the dispute

Federal courts have subject ,atter jurisdiction in two situations:

1. When a federal question is involved. 2. Federal question is involved when there is a diversity of citizenship.

Who typically prefers Mediation as an ADR? (3)

1. disputes between business partners, 2. employers and employees, or other parties involved in long-term relationships.

State courts may include

1. trial courts of limited jurisdiction, 2. trial courts of general jurisdiction, 3. appellate courts (intermediate appellate courts), and 4. the state's highest court (often called the state supreme court).

in rem jurisdiction "jurisdiction over the thing."

A court can also exercise jurisdiction over property that is located within its boundaries.

Negotiation

A process in which the parties attempt to settle their dispute informally, with or without attorneys to represent them. Attorneys frequently advise their clients to negotiate a settlement voluntarily before they proceed to trial. Parties may even try to negotiate a settlement during a trial or after the trial but before an appeal. Negotiation usually involves just the parties themselves and (typically) their attorneys. (third parties are not considered attorneys)

long arm statute

A state statute where a state court can exercise personal jurisdiction over certain out-of-state defendants based on activities that took place within the state.

A major provider of ADR services is the

American Arbitration Association (AAA),

Award

Arbitrator's decision; usually final word on matter

Courts having original jurisdiction are

Courts having original jurisdiction are courts of the first instance, or trial courts. These are courts in which lawsuits begin, trials take place, and evidence is presented. In the federal court system, the district courts are trial courts.

trial courts of limited jurisdiction

Courts of limited jurisdiction as to subject matter are generally inferior trial courts or minor judiciary courts. Limited jurisdiction courts might include local municipal courts (which could include separate traffic courts and drug courts) and domestic relations courts (which handle divorce and child-custody disputes) Small Claims Courts

Questions of Fact

Deals with what really happened in regard to the dispute being tried Ex: such as whether a party actually burned a flag.

The State and Federal Court Systems

Each state has its own court system. Additionally, there is a system of federal courts - Branching off from US Courts of appeals is the federal administrative agencies - Branching off from US District Courts on the right is the Specialized Us Courts - State Court of Appeals and State Trial Courts of General Jurisdiction branch towards State Administrative Agencies

Diversity of Citizenship: Corporations

For purposes of diversity jurisdiction, a corporation is a citizen of both the state in which it is incorporated and the state in which its principal place of business is located.

Arbitration Clauses

Frequently, parties include an arbitration clause in a contract specifying that any dispute arising under the contract will be resolved through arbitration rather than through the court system. Parties can also agree to arbitrate a dispute after it arises.

Jurisdiction Over Persons - In Personam Jurisdiction

Generally, a particular court can exercise personam jurisdiction (in personal jurisdiction) over any person or business that resides in a certain geographic area. Court jurisdiction over the "person" involved in a legal action; personal jurisdiction. Ex: State Trial Court: In personam jurisdiction over county and district. Ex: State Supreme Court: All residents of the state.

• CASE 4.2 Gucci America, Inc. v. Wang Huoquing (2011). United States District Court, Northern District of California, 2011 WL 30972 (2011).

Gucci America, Inc., a New York corporation headquartered in New York City, is part of Gucci Group, a global fashion firm with offices in China, In connection with its products, Gucci uses twenty-one federally registered trademarks. Gucci also operates a number of boutiques, some of which are located in California. Wang Huoqing, a resident of the People's Republic of China, operates numerous websites. When Gucci discovered that Wang Huoqing's websites offered for sale counterfeit goods—products bearing Gucci's trademarks but not genuine Gucci articles—it hired a private investigator in San Jose, California, to buy goods from the websites. The investigator purchased a wallet that was labeled Gucci but was counterfeit. Gucci filed a trademark infringement lawsuit against Wang Huoqing in a federal district court in California seeking damages and an injunction to prevent further infringement. Wang Huoqing was notified of the lawsuit via e-mail but did not appear in court. Gucci asked the court to enter a default judgment—that is, a judgment entered when the defendant fails to appear. First, however, the court had to determine whether it had personal jurisdiction over Wang Huoqing based on the Internet sales. Under California's long-arm statute, federal courts in California may exercise jurisdiction to the extent permitted by the Due Process Clause of the Constitution. The Due Process Clause allows federal courts to exercise jurisdiction where the defendant has had sufficient minimum contacts with the forum to subject him or her to the specific jurisdiction of the court. The courts apply a three-part test to determine whether specific jurisdiction exists: The courts apply a three-part test to determine whether specific jurisdiction exists: (1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable. The U.S. District Court for the Northern District of California held that it had personal jurisdiction over the foreign defendant, Wang Huoqing. The court entered a default judgment against Wang Huoqing and granted Gucci an injunction.

Arbitration Clauses (International Dispute Resolution)

In international arbitration proceedings, 1. the third party may be a neutral entity, 2. a panel of individuals representing both parties' interests, 3. or some other group or organization.

Standing: Remedy

It must be likely, as opposed to merely speculative, that a favorable court decision will remedy the injury suffered.

Before a lawsuit can be brought before a court, the following requirements must be met: (3)

Jurisdiction Venue Standing to Sue

Why would someone prefer an alternative dispute resolution?

Litigation is expensive and time consuming

Where did judicial review come from? (Case Name, What was Stated in the Court Decision)

Marbury v. Madison In that decision, the Court stated: Chief Justice Marshall 1. it is the authority and duty of the judicial department to say what the law is. 2. If two laws conflict with each other, the courts must decide on the operation of each. 3. [I]f both [a] law and the Constitution apply to a particular case, ... the Court must determine which of these conflicting rules governs the case."

International Jurisdictional Issues

Most courts are indicating that minimum contacts—doing business within the jurisdiction, for instance—are enough to compel a defendant to appear. The effect of this standard is that a business firm has to comply with the laws in any jurisdiction in which it targets customers for its products. This situation is complicated by the fact that many countries' laws on particular issues—free speech, for instance—are very different from U.S. laws.

Arbitration Statutes

Most states have statutes (often based in part on the Uniform Arbitration Act) under which arbitration clauses will be enforced.

Summary Jury Trials

Numerous federal courts hold summary jury trials, in which the parties present their arguments and evidence and the jury renders a verdict. The jury's verdict is not binding, but it does act as a guide to both sides in reaching an agreement during the mandatory negotiations that immediately follow the trial.

Summary Proceedings

Other alternatives being employed by the courts include summary proceedings, which dispense with some formal court procedures, and the appointment of special masters to assist judges in deciding complex issues.

Rule of Four

The Court will not issue a writ unless at least four of the nine justices approve of it.

Mandatory Arbitration in the Employment Context

The United States Supreme Court, however, has held that mandatory arbitration clauses in employment contracts are generally enforceable. - Despite the fact that many employees claim they are at a disadvantage when they are forced, as a condition of being hired, to agree to arbitrate all disputes and thus waive their rights under statutes designed to protect employees.

Jurisdiction

The authority of a court to hear a case and decide a specific action.

Jurisdiction in Cyber Space - The Sliding Scale Standard (3 rules for jurisdiction)

The courts have developed a "sliding-scale" standard to determine when they can exercise personal jurisdiction over an out-of-state defendant based on the defendant's Web activities. The sliding-scale standard identifies three types of Internet business contacts and outlines the following rules for jurisdiction: 1. When the defendant conducts substantial business over the Internet (such as contracts and sales), jurisdiction is proper. 2. When there is some interactivity through a website, jurisdiction may be proper, depending on the circumstances. It is up to the courts to decide how much online interactivity is enough to satisfy the minimum-contacts requirement. 3. When a defendant merely engages in passive advertising on the Web, jurisdiction is never proper.

essential role of the judiciary

The essential role of the judiciary—the courts—in the American governmental system is to interpret the laws and apply them to specific situations.

The body of American law includes: (4)

The federal and state constitutions Statutes passed by legislative bodies Administrative law The case decisions and legal principles that form common law

Case Analysis 4.1 Mala v. Crown Bay Marina, Inc United States Court of Appeals, Third Circuit, 704 F.3d 239 (2013).

The following case focused on whether diversity jurisdiction existed. A boat owner was severely burned when his boat exploded after being overfilled with fuel at a marina in the U.S. Virgin Islands. The owner filed a suit in a federal district court against the marina and sought a jury trial. The defendant argued that a plaintiff in an admiralty, or maritime, case (a case based on something that happened at sea) does not have a right to a jury trial unless the court has diversity jurisdiction. The defendant claimed that because both parties were citizens of the Virgin Islands, the court had no such jurisdiction. - Kelley Mala citizen of the US Virgin Islands - Refueled at Crown Bay Marina at an St.Thomas Virgin Islands -The automated gas pump was malfunctioning for a few days the attendant said. When Mala went to pull off from the boat the tank exploded. - Mala: Complaint sued for negligence alleged that the District Court had admiralty and diversity jurisdiction over the case, and it requested a jury trial. - Crown Bay argued that there should be no jury trial unless diversity of citizenship and both Mala and Crown Bay are citizens of the Virgin Islands. District Court ruled that both Mala and Crown Bay were citizens. - Mala argues that the District Court improperly refused to conduct a jury trial. This claim ultimately depends on whether the District Court had diversity jurisdiction. -The Seventh Amendment [to the U.S. Constitution] creates a right to civil jury trials in federal court: "In Suits at common law the right of trial by jury shall be preserved." Admiralty suits are not "Suits at common law," which means that when a district court has only admiralty jurisdiction the plaintiff does not have a jury-trial right. But [a federal statute] allows plaintiffs to pursue state claims in admiralty cases as long as the district court also has diversity jurisdiction. In such cases [the statute] preserves whatever jury-trial right exists with respect to the underlying state claims. -Unfortunately for Mala, the District Court concluded that Crown Bay also was a citizen of the Virgin Islands. Mala rejects this conclusion. -Accordingly, the parties were not diverse and Mala does not have a jury-trial right.

Although the parties may appeal an arbitrator's decision, a court's review of the decision will be much more restricted in scope than an appellate court's review of a trial court's decision.

The general view is that because the parties were free to frame the issues and set the powers of the arbitrator at the outset, they cannot complain about the results.

Change of Venue is less commonly granted in courts due to

The internet and accessibility of information

Mediator

The mediator, who need not be a lawyer, usually charges a fee for his or her services (which can be split between the parties).

Early Neutral Case Evaluation

The parties select a neutral third party (generally an expert in the subject matter of the dispute) and explain their respective positions to that person. The case evaluator assesses the strengths and weaknesses of each party's claims.

Standing: Harm

The party bringing the action must have suffered harm—an invasion of a legally protected interest—or must face imminent harm. The controversy must be real and substantial rather than hypothetical.

What is Judicial Review?

The process by which courts decide on the constitutionality of legislative enactments and actions of the executive branch.

Alternative Dispute Resolution (3)

The resolution of disputes in ways other than those involved in the traditional judicial process. Negotiation, mediation, and arbitration are forms of ADR.

Online Dispute Resolution (ODR)

The resolution of disputes with the assistance of organizations that offer dispute-resolution services via the Internet.

A court's jurisdiction over subject matter is usually defined in the statute or constitution creating the court. In both the federal and the state court systems, a court's subject-matter jurisdiction can be limited by any of the following:

The subject of the lawsuit. The sum in controversy. Whether the case involves a felony (a more serious type of crime) or a misdemeanor (a less serious type of crime). Whether the proceeding is a trial or an appeal.

Standing: Causation

There must be a causal connection between the conduct complained of and the injury.

The United Nations of Convention on the Recognition and Enforcement of Foreign Arbitral Rewards

This convention assists in the enforcement of arbitration clauses, as do provisions in specific treaties among nations.

The Federal Court System

Three tiered model consisting of: 1. U.S. district courts (trial courts of general jurisdiction) and various courts of limited jurisdiction, 2. U.S. courts of appeals (intermediate courts of appeals), and 3. the United States Supreme Court.

trial courts of general jurisdiction

Trial courts that have general jurisdiction as to subject matter may be called county, district, superior, or circuit courts. State trial courts of general jurisdiction have jurisdiction over a wide variety of subjects, including both civil disputes and criminal prosecutions. In some states, trial courts of general jurisdiction may hear appeals from courts of limited jurisdiction.

Most online forums do not automatically apply the law of any specific jurisdiction. Instead, results are often based on general, universal legal principles. As with most offline methods of dispute resolution, any party may appeal to a court at any time. True/False

True

The power of judicial review is exercised by both federal and state courts. True/False?

True

When concurrent jurisdiction exists, a party may choose to bring a suit in either a federal court or a state court. True or False

True

Diversity of Citizenship

Under Article III, Section 2, of the Constitution, a basis for federal court jurisdiction over a lawsuit between (1) citizens of different states, (2) a foreign country and citizens of a state or different states, or (3) citizens of a state and citizens or subjects of a foreign country. The amount in controversy must be more than $75,000 before a federal court can take jurisdiction in such cases.

Concurrent Jurisdiction

When both federal and state courts have the power to hear a case, as is true in lawsuits involving diversity of citizenship, concurrent jurisdiction exists.

Section 2 of Article III States that ..."the judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority." What does this mean? (Federal Question)

Whenever a plaintiff's cause of action is based on: 1. The Us Constitution 2. A Treaty 3. A federal Law A federal question arises. Any lawsuit involving a federal question, such as a person's rights under the U.S. Constitution, can originate in a federal court. Note that in a case based on a federal question, a federal court will apply federal law.

An example of a federal court of limited subject-matter jurisdiction

a bankruptcy court. Bankruptcy courts handle only bankruptcy proceedings, which are governed by federal bankruptcy law.

Jurisdiction over Subject Matter

a limitation on the types of cases a court can hear.

An example of a state court of limited jurisdiction

a probate court. Probate courts are state courts that handle only matters relating to the transfer of a person's assets and obligations after that person's death, including matters relating to the custody and guardianship of children.

Standing to Sue

a sufficient stake in a matter to justify seeking relief through the court system.

Courts having appellate jurisdiction

act as reviewing, or appellate, courts. In general, cases can be brought before appellate courts only on appeal from an order or a judgment of a trial court or other lower courts.

Small Claims Courts: trial courts of limited jurisdiction

are inferior trial courts that hear only civil cases involving claims of less than a certain amount, such as $5,000 (the amount varies from state to state). Procedures in small claims courts are generally informal, and lawyers are not required (in a few states, lawyers are not even allowed). Decisions of small claims courts and municipal courts may sometimes be appealed to a state trial court of general jurisdiction.

Article III of the Constitution establishes ....

boundaries of the federal judicial power.

Question of Law

concerns the application or interpretation of the law Ex: —such as whether flag-burning is a form of speech protected by the First Amendment to the U.S. Constitution. Only a judge, not a jury, can rule on questions of law.

Trial Courts

courts in which trials are held and testimony is taken. State trial courts have either general or limited jurisdiction, as defined earlier.

Forum Selection and Choice of Law Clauses

designate the jurisdiction (court or country) where any dispute arising under the contract will be litigated and which nation's law will be applied (respectively).

Mini Trial

each party's attorney briefly argues the party's case before the other party and a panel of representatives from each side who have the authority to settle the dispute. Typically, a neutral third party (usually an expert in the area being disputed) acts as an adviser. If the parties fail to reach an agreement, the adviser renders an opinion as to how a court would likely decide the issue.

Federal Arbitration Act (FAA)

enacted in 1925, enforces arbitration clauses in contracts involving maritime activity and interstate commerce. The courts have defined interstate commerce broadly, and so arbitration agreements involving transactions only slightly connected to the flow of interstate commerce may fall under the FAA. The FAA established a national policy favoring arbitration that the United States Supreme Court has continued to reinforce.

All state court systems are the same (true/false)

false

Federal courts have exclusive jurisdiction in cases involving

federal crimes, bankruptcy, most patent and copyright claims, suits against the United States, and some areas of admiralty law.

State courts also have exclusive jurisdiction over certain subjects

for instance, divorce and adoption.

In both the federal and the state court systems, there are courts of ______ and courts of _________.

general (unlimited) jurisdiction and courts of limited jurisdiction.

The Court of Appeals for the Thirteenth Circuit, called the Federal Circuit

has national appellate jurisdiction over certain types of cases, including those involving patent law and those in which the U.S. government is a defendant.

Many factors can affect a party's decision to litigate in a federal versus a state court. Examples include:

include the availability of different remedies, the distance to the respective courthouses, or the experience or reputation of a particular judge.

Appeals to the Supreme Court - Writ of Certiorari

is an order issued by the Supreme Court to a lower court requiring the latter to send it the record of the case for review. To bring a case before the Supreme Court, a party requests the Court to issue a writ of certiorari.

Venue

is concerned with the most appropriate location for a trial. For instance, two state courts (or two federal courts) may have the authority to exercise jurisdiction over a case.Nonetheless, it may be more appropriate or convenient to hear the case in one court than in the other.

Venue in a civil case

is where the defendant resides or does business,

minimum-contacts requirement

means that the defendant must have sufficient connection to the state for the judge to conclude that it is fair for the state to exercise power over the defendant.

Standing

means that the party that filed the action in court has a legally protected interest at stake in the litigation. At times, a person can have standing to sue on behalf of another person, such as a minor (child) or a mentally incompetent person.

A corporation is subject to the jurisdiction only in states where it does.... (answer). The courts look at the amount of business the corporation does within the state relative to the amount it does elsewhere.

such substantial business that it is "at home" in that state.

Before a state court can exercise jurisdiction using the long arm statute, the defendant must have

sufficient contacts, or minimum contacts with the state to justify the jurisdiction

Under the power vested by the United States Constitution, the federal court system extends to: (3)

the US territories of Guam, Puerto Rico, and the Virgin Islands.

The Issue of Arbitrability

the court must decide whether the matter is one that must be resolved through arbitration. If the court finds that the subject matter in controversy is covered by the agreement to arbitrate, then it may compel arbitration.

Why is the jurisdiction of federal courts limited?

the federal government is a government of limited powers

nonbinding arbitration

the parties can go forward with a lawsuit if they do not agree with the arbitrator's decision. Arbitration that is mandated by the courts often is not binding on the parties.

litigation

the process of resolving a dispute through the court system

As already noted, a federal court will apply federal law in cases involving federal questions. In a case based on diversity of citizenship, in contrast, a federal court will apply the relevant state law (which is often the law of the state in which the court sits). true/false

true

Venue in a criminal case

whereas venue in a criminal case normally is where the crime occurred.

US Court of Appeals

- 13 Us court of appeals (us circuit courts of appeals - 12 of these courts (including court of appeals for the DC circuit) hear appeals from the federal district courts located within their respective judicial circuits. - Decisions are binding on all courts within the circuit courts jurisdiction

The US ___ Court Systems... one for (3)

- 52 - one for each of the fifty states, - one for the District of Columbia, - and a federal system.

Corporate Contacts (Jurisdiction) (2)

- A corporation normally is subject to personal jurisdiction in the state in which it is incorporated, has its principal office, and/or is doing business. - Courts apply the minimum-contacts test to determine if they can exercise jurisdiction over out-of-state corporations.

American Arbitration Association (AAA),

- Cases brought before the AAA are heard by an expert or a panel of experts in the area relating to the dispute and are usually settled quickly. Generally, about half of the panel members are lawyers. - provides arbitration services for international as well as domestic disputes.

US District Courts

- Equivalent of a state trial court of general jurisdiction. - Have original jurisdcition in matters involving a federal question and concurrent jurisdiction with state courts when diversity jurisdiction exists. - Federal Courts with original but special (or limited jurisdiction (bankruptcy and tax courts) - Every state has at least one federal district court. - Today, there are ninety-four federal judicial districts. - Florida has the 11 Court of Appeals (Federal District Court)

Appellate, or Reviewing, Courts

- Every state has at least one court of appeals (appellate court, or reviewing court), which may be an intermediate appellate court or the state's highest court. - About three-fourths of the states have intermediate appellate courts. - An appellate court panel of three or more judges reviews the record of the case on appeal, which includes a transcript of the trial proceedings. - The appellate court hears arguments from attorneys and determines whether the trial court committed an error. - focus on questions of law, not questions of fact. - Give significant weight to the trial court finding on questions of fact because the trial court and jury were in a better position to evaluate the testimony.(The trial court judge and jury can directly observe witnesses' gestures, demeanor, and other nonverbal behavior during the trial. An appellate court cannot.)

Are federal courts superior to state courts?

- NO, Federal Courts are not superior to state courts: an independent system of courts that derives its authority from Article II, Section 2 of the US Constitution.

US Supreme Court

- Nine justsices - Other federal courts are inferiror - Mostly an appeals court - appellate authority over cases involving federal questions that have been decided in the state courts -Final authority on the Constitute and Federal Law

Types of disputes resolved in civil lawsuits and ADR

- The disputes resolved have most commonly involved rights to domain names (website addresses) or the quality of goods sold via the Internet, including goods sold through Internet auction sites. - ODR may be best for resolving small to medium-sized business liability claims, which may not be worth the expense of litigation or traditional ADR methods. In addition, some cities use ODR as a means of resolving claims against them.

Highest State Courts

- Usually called the supreme court or Court of Appeals or Supreme Court of Appeals -Decisions on each states highest court on all questions of state law are final. - Only when issues of federal law are involved can the US Supreme Court overrule a decision made by a states highest court. -

A denial of the request to issue a writ of certiorari is NOT (3)

- a decision on the merits of the case, - nor does it indicate agreement with the lower court's opinion. - has no value as a precedent. Denial simply means that the lower court's decision remains the law in that jurisdiction.

How are federal judges appointed

- appointed by the president of the US, subject to confirmation by the US Senate. - lifetime appointments - can be removed through impeachment but rare